Pump and Dump

Definition

A manipulation scheme where fraudsters artificially inflate a stock's price (pump) then sell their shares (dump) to unsuspecting buyers. Profitable for liars.

Example Usage

The SEC charged the group with pump and dump after finding they artificially promoted a penny stock before selling at inflated prices.

Origin

Descriptive slang clearly indicating the two-phase scheme.

Fun Fact

Modern pump and dumps happen on social media where fraudsters use coordinated posts to create hype before dumping on retail investors.

Source: Securities fraud terminology, SEC enforcement

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